Quick overview

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Hims & Hers (HIMS) dropped nearly 35% on Monday after Novo Nordisk (NVO) announced it was ending a partnership to sell its popular weight-loss drug, Wegovy, on Hims’ telehealth platform.

Novo Nordisk claimed that Hims & Hers was breaking the law by selling Wegovy’s primary ingredient, semaglutide, an imitation, in addition to Novo’s own branded drugs.

Hims & Hers ignored the law that bans selling compounded medications in large quantities under the pretense of “personalization,” Novo said in a statement Monday. Novo’s stock fell about 5.5 percent.  CEO Andrew Dudum posted on X that Novo was pressured by its commercial team to “steer patients to Wegovy.”

“Any pharmaceutical company’s anticompetitive demands that limit patient choice and interfere with providers’ autonomy to make their own decisions will not be allowed to intimidate us,” Dudum stated in the post.

The two companies announced a partnership that can enable patients to buy Wegovy through Hims’ telehealth platform.

After compounded, or copycat, GLP-1s were removed from the market, Novo’s competitor Eli Lilly (LLY) and other pharmaceutical companies responded by forming agreements to close the access gap. Lilly and Novo struggled to produce enough of their GLP-1s to meet the unexpected surge in demand in the weight-loss market, leading them to turn to compounded drugs. When a drug is in short supply, the Food and Drug Administration (FDA) allows the sale of imitations without requiring the same testing as the original products.